Citi’s latest industry survey suggests tokenized collateral has crossed the line from pilot project to practical reality, with more than three-quarters of financial institutions expecting to deploy digital collateral in some form during 2026.
The bank’s Sept. 24 report, Digital Collateral: A Practical Reality, prepared together with research firm The ValueExchange, finds that 77% of surveyed institutions expect to use some form of tokenized collateral during 2026. The figure marks a sharp step up from earlier industry polling, which had placed the share of institutions planning to actively manage tokenized collateral at 52%.
The report examines tokenized cash, money market funds, government bonds and other assets used for margin and financing. Its central conclusion is that banks and market operators are moving beyond sandbox testing and into live production environments for blockchain-based settlement.
The 346 million USD problem tokenization aims to solve
Citi frames the shift against a costly structural inefficiency in traditional finance. Systemically important financial institutions manage an average of roughly 74 billion USD in collateral each day, spread across approximately 65 custody locations, according to the report’s findings.
Because settlement hours, fragmented systems and outdated cutoffs restrict when assets can move, about 25% of that collateral remains idle or unremunerated. At a large institution, the idle balance can reach around 15 billion USD. Citi estimates that inefficient collateral deployment costs a Tier 1 institution roughly 346 million USD per year in foregone earnings.
Christopher Perkins, president of CoinFund and a former Citi derivatives executive, called the report a landmark for the asset class. “Collateral is one of the very best use cases for tokenized products,” Perkins wrote on X. “It’s the only time in my career where there is an opportunity to lower collateral and lower risk.”
Tokenized repo is already processing trillions
Repurchase agreements have emerged as the most developed institutional application of blockchain-based collateral. Citi’s report estimates that roughly 5% of monthly repo volume is already transacted in tokenized form.
Production data backs that up. Broadridge said its Distributed Ledger Repo platform processed 8 trillion USD in volume during July alone, with average daily volume of 365 billion USD. The platform lets firms settle repo transactions and move tokenized collateral without replacing their existing trading systems.
The report also highlights a yield dimension: around 60% of global margin is currently held in non-yielding cash. Tokenized money market funds could combine yield with 24/7 transferability, allowing collateral to remain invested until the moment it must be moved. JPMorgan’s filed OnChain Liquidity-Token Money Market Fund, which holds cash, short-term U.S. government securities and collateralized repos, is cited as an early regulated example of the structure.
DTCC prepares October launch for tokenized securities
U.S. Treasury securities form the next frontier. The Depository Trust & Clearing Corporation plans to launch its DTC Tokenization Service in October 2026 after completing live production trades. The service will allow eligible securities held at DTC to be represented in tokenized form while retaining their existing ownership rights and investor protections.
For crypto-native markets, the institutional embrace of tokenized collateral closes a long-running loop. The same tokenized cash-legs, money market funds and Treasuries that DeFi protocols have used as base assets are now being adopted by the custodians and clearing houses that once dismissed blockchain settlement as speculative infrastructure.
What it means for the market
The collateral use case matters because it targets a genuine cost center rather than a hypothetical efficiency. If even a fraction of the idle 25% of institutional collateral becomes mobile through tokenization, the demand for tokenized cash equivalents and government securities — the same assets backing major stablecoins and tokenized fund products — grows accordingly.
Citi’s data point that 77% of institutions expect deployment in 2026 suggests the transition is no longer optional experimentation. With DTCC’s service launching next month and tokenized repo already clearing hundreds of billions daily, digital collateral has moved from whitepaper to balance sheet.
Market snapshot at the time of writing (Sept. 27, 12:00 UTC): BTC trades at 84,883 USD (+0.86% in 24h, market cap 1.71 trillion USD), ETH at 2,709.85 USD (+0.77%, market cap 330.8 billion USD), and SOL at 124.04 USD (+2.26%, market cap 72.9 billion USD), with the Crypto Fear & Greed Index at 70, signaling Greed.
65 custody locations per institution is the stat i cant get past. half the idle problem is banks simply not knowing what they own where after the cutoffs hit
65 locations also means 65 sets of cutoff times. half the idle problem is timezone scheduling wearing a tech costume
Exactly, and the survey still counts some form of tokenized collateral, which can mean one sandbox MMF in one jurisdiction. The 77 percent figure is doing a lot of marketing work.
the jump from 52% to 77% in one survey cycle is the real story. institutions dont shift plans that fast unless something already changed internally
Agreed. A Sept 24 report titled Digital Collateral A Practical Reality reads like the pilots already worked.
went from 52% to 77% in one survey cycle? either adoption is genuinely accelerating or institutions just tell surveys whatever sounds progressive
surveys always overstate intent but even if half the 77% actually ships something this year thats still a huge jump from the old polling
@AnonRefunder worked treasury at a bank, these surveys measure committee mood more than roadmap. but the 346m a year burn number is doing the real persuading internally
77% of institutions jumping from 52% in a single survey cycle is wild. either the pilots actually worked or every bank just answered with what they wanted to be true
or the pilots quietly worked and nobody wanted to be the last bank admitting it. survey answers tend to follow internal budgets by two quarters
two quarters is generous lol. nobody answered 52 percent in the last poll because admitting you have zero tokenization budget was the worse headline
also a survivorship angle, the banks with zero tokenization plans probably declined the survey entirely. 77 percent of respondents is a very different number from 77 percent of institutions
The 346 million USD a year figure is the number that matters here. Banks do not rewire plumbing for ideology, they do it when idle assets cost real money.
the 346M is just the measurable part too. 65 custody locations per institution means armies of staff reconciling positions every morning, and that cost never shows up in any survey line item
tokenized money market funds as margin is the sleeper part of this report. everyone obsesses over the bonds angle instead
the MMF point is underrated. and its the only part that actually fixes the 74 billion a day sitting across 65 custody locations problem, bonds settle way slower than funds move
25% of 74 billion a day idle is over 18 billion doing nothing. even shaving a fifth off that pays for the entire tokenization build within a month
the MMF point is underrated. and its the only part that actually fixes the 74 billion a day sitting across 65 custody locations problem, bonds settle way slower than funds move
this. same-day margin on tokenized MMFs is the entire pitch, the bonds angle is just the headline everyone quotes
@Hannes Wik MMFs as margin is the whole ballgame. once a tokenized fund is accepted as collateral the 74 billion a day problem stops being theoretical overnight
MMFs first is also the realistic sequencing. tokenized funds already fit collateral eligibility rules in most jurisdictions, the bonds side is years of legal wrangling per market
per market legal wrangling is the part nobody prices in. repo eligibility rules differ across every jurisdiction, the bonds side is a decade of paperwork
quiet plumbing stories like this end up mattering more than whatever pumps today. nobody tweets about collateral mobility until a margin call fails
same-day margin on tokenized MMFs would shrink that 74 billion a day footprint fast. the tech here is boring on purpose, thats the actual sell to a treasury desk
the 74 billion idle number assumes intraday liquidity just sits still though. treasury desks wont move until tokenized MMFs count as HQLA everywhere, thats the actual holdup
HQLA treatment is exactly the gate. the second tokenized MMFs qualify everywhere, that 15 billion idle figure at every tier 1 stops being an anecdote
the HQLA gate is right, and BIS work on tokenized collateral eligibility is already drafted. once two major jurisdictions qualify tokenized MMFs the rest copy the rulebook, that is how banking regulation always moves